In the field of management of financial assets, numerous calculations must be carried out on a daily basis in order to determine accurate holdings of clients, process trades, and provide accurate financial reporting, among other needs. By way of non-limiting example, for an insurance company that provides life insurance products, including annuities, having assets invested in a holder s selection of funds, there are numerous daily calculations. Fractional fees, such as mortality and expense fees, rider fees, and management fees, are based on net asset value on a daily basis, such as 360 days per year, and must be calculated daily and deducted from account values. Daily variations in net asset values of funds must be received and made available for reporting to clients as well as being used in various calculations. Instructions from clients to move funds from one investment vehicle to another must be converted into trade instructions that can be executed by brokers and clearinghouses. Funds must be transferred to and from company bank accounts in appropriate amounts in settlement of trading transactions. Financial reporting for client records, corporate record keeping and regulatory oversight must be performed based on information including values and holdings of funds and securities.
Problems that are encountered in the administration of these systems include assuring that all transactions are completed in a timely and accurate manner. For example, as prices of securities and net asset values of funds vary on a daily basis, any delay or errors in executing trades and reconciling payments may result in significant losses. Further challenges are encountered in providing timely and accurate data for financial reporting purposes. The creation of records that are sufficiently detailed and reliable for audit purposes is a still further challenge. A further challenge is integration of these processes with the requirements of other entities, such as fund companies and investment managers. Some entities may perform some of their own trading functions for example, while others may not. Various entities may employ different electronic and paper standards for data transmission.